The project will supply additional gas volumes to Enertrade under the terms of an amended Gas Sale Agreement, also signed today, which now provides for the sale of over 300 PJ of coalbed methane to the Townsville market up to 2020.
The Moranbah Gas Project is a 50/50 joint venture between BHP Billiton and the operator, CH4.
QNI is the largest existing industrial energy user in Townsville and the contract to supply up to 10 PJ of gas each year until 2020 represents a major diversification away from QNI’s previous fuel sources of coal and fuel oil, said CH4 managing director and chief executive officer Louis Rozman.
“We are delighted to be a major energy provider to one of the world’s significant nickel processing plants and the validation this represents of coal seam gas as a reliable, low cost, clean fuel source for Queensland,” Rozman said.
“This is the most significant recent conversion of existing facilities to gas demonstrating the appeal of competitively priced coal seam gas to industrial users. This will add significant additional volumes of coal seam gas being supplied into the Townsville market”.
“The decision by QNI reinforces our confidence in the substantial growth of the Townsville energy market, which has the potential to more than double in coming years. We are very optimistic about the emergence of additional industrial customers.”
QNI is currently undertaking a major plant expansion at Yabulu associated with the development of the Ravensthorpe nickel mine in Western Australia. The expanded plant is scheduled to come into full operation in 2006. Initial gas supply by the MGP for use by QNI is likely to start late this year.
